Throughout the years, there has been a constant controversy over whether the World Trade Organization should enforce global free trade. The primary idea is to establish in which all are happy. Although there are many advocates for trade liberalization, as well as many who oppose. I believe free trade may be advantageous for both large and small-industrialized countries, but it does not favor the smaller developing countries needs primarily. If the World Trade Organization eliminates tariffs and quotas, it could create more jobs, which could result in more wealth or new wealth for the country because of increased demand and increased trade of a product(s) that a country produces.
However, if a developing country substantially increases production and therefore trade, it is very possible that the country, which may have few and small industries could risk depleting natural resources by trying to meet demand with limited supply. Also if country imports little utilizing the majority of the products created it economy can easily become dependent.
In this situation an increase in imports could very well be disastrous causing business that are unable to compete with imported products and to stop operating, and a potential spike in unemployment if they. In addition, while free trade can increase trade, if trade increases too much, it could cause a decrease in the demand leading to a decrease in price for a product from a particular developing country because of competition from imports. If this country mainly specializes in that particular product or industry, it could result in many workers losing their jobs and/or the country losing money because of the need to lower prices. For this reason, there should be some type of regulations to prevent these situations from occurring. Members of the World Trade Organization should not have to fear the effects of trading with its fellow members. Regulation in many cases is a good thing to implement. Many times it is used to sort of even the odds between the countries that have a lot and those that have a little. But so frequently can a little regulation turn into too much regulation. When this happen it through off the natural flow of trade. Although trade regulation can unfortunately limit trade with some countries, which could result in less diversified and productive countries, trade protection is still safer for developing countries because small developing countries cannot compete as effectively as the more developed industrialized countries. These two types of countries have two completely different levels of ability and capacity to trade. If a developing country has one main industry, it cannot risk trading with large developed countries that have many huge similar industries. It is not fair to force these developing countries to compete globally if they are inexperience and are not yet prepared to trade in this manner because of lack of resources, wealth, and labor that these experienced developed countries have. Also, free trade can force producers of developing countries to lower prices and provide lower quality, and standards because of increasing competition from imports. If a producer has to do this substantially, he/she may have to lower costs in many different areas. In many cases this ability to lower cost starts a pricing battle, which sometimes allows some of the more infantile markets to stay competitive, but at the same time this is one of the major contributors that exclude smaller markets to staying competitive. .
Many developing and stable markets need trade policies that cater to their economic conditions. Trade liberalization would effect all people on all levels. The World Trade Organization needs to consider all of its members and the social and environmental impacts of enforcing trade liberalization. Free trade places some members of the World Trade Organization in danger and at a disadvantage. The decision of this Organization should carefully consider the impact of free trade on every member before making decisions.
Cite this world trade organization
world trade organization. (2019, Apr 24). Retrieved from https://graduateway.com/world-trade-organization-2/